Thursday, 5 May 2011
Limited Line Discounter growth
2008 saw growth in the sales of the Limited Line Discounters. The growth was widely attributed to the recession and weak consumer sentiment leading customers to seek cost reductions in their every day lives. There is no question that Aldi & Lidl are significantly cheaper than the mainstream competitors. The market share of Aldi & Lidl is still growing (currently 3.3% & 2.6% respectively), but not because they are attracting significantly new customers. Rather, those that tentatively (tentatively because frankly the stores are mostly a bit grim) dipped their metaphorical toes into a Lidl or Aldi store back in 2008 have actually found the products to be surprisingly good. This is of course good news for the discounters who have really struggled to communicate their strategy in the UK. They sell good stuff cheaply while the UK consumer assumes a strong correlation between price and quality and have assumed that the products are poor quality substitutes to the usual Tesco fare... With limited marketing budgets word of mouth is likely to form their best means for growing their customer base but before their market shares grow considerably when they can be really classed as 'mainstream' grocers they will have to improve their overall professionalism. Product availability has to be assured & mould vegetables on display just will not do!
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